Employers Responsible For Wages For Non-Productive Employment Attributable To Social Security Card Requirement

The DOL Administrative Review Board has decided that employers are responsible for paying wages to H-1B foreign nationals who—but for a delay in the Social Security Account enumeration and card issuance process—would be actively employed. The same rule likely will be applied to other nonimmigrant workers who experience delays in Social Security number processing.

The Board held the employer must pay the H-1B worker for her nonproductive activity during the time she was awaiting the delivery of her Social Security Card. Under 20 C.F.R. § 655.731(c)(7)(i), if the H-1B nonimmigrant is not performing work due to the employer’s requirement that she obtain a Social Security Card before commencing employment with the employer, the employer must pay the employee at the required wage for the occupation listed on the Labor Condition Application filed with the DOL. USDOL & Wirth v. University of Miami Sch. of Med., ARB Case No. 10-090, 10-093, ALJ Case No. 2009-LCA-026 (Dec. 20, 2011).

A Social Security Number is not required for employment verification (I-9) purposes, but many employers require it for payroll processing. H-1B employees are authorized to work upon lawful admission to the United States. Accordingly, to the extent that an employer requires a Social Security Number as part of payroll processing, it must be prepared to pay the employee if it elects to delay employment during the SSA enumeration process.

The DOL likely will apply this rule to other nonimmigrant categories, including the L-1, H-3, E-3, and O-1. Therefore, employers should consider practices that will allow these authorized workers to start employment while waiting for Social Security enumeration. Such practices include setting up a temporary payroll profile with a “dummy” number and updating the profile once the number is issued.

An employer that participates in E-Verify must verify its employees’ Social Security Numbers through the free federal program. Thus, such an employer needs the employee Social Security Numbers and should set a projected start date that allows enough time for Social Security processing.

Whatever the case, employers must now be mindful of payment responsibilities for foreign nationals sponsored to work for the employer in the U.S. Once the approved start date hits, so does the wage/payment requirement, requiring that employers who insist on Social Security Numbers from all employees take a more active role in tracking and advising employees how and when they should apply.